Arizona Eagle Mining Corp. Advances Plan to Reopen Historic McCabe Mine Workings

TSXV: AZEM | OTCQB: AZEMF

Overview

Arizona Eagle Mining Corp. (the "Company" or "Arizona Eagle") announced that it has engaged Hancon Mining Division USA Corp. ("Hancon"), pursuant to a pre-construction engineering agreement dated September 29, 2026 (the "Engineering Agreement"), to complete engineering design work for the reopening of the past-producing McCabe Mine to support underground drilling. According to the company, the Engineering Agreement covers the initial engineering and assessment phase of the program only, and the balance of the work required to reopen the mine will be the subject of a separate agreement.

As announced on August 25, 2026, the Company completed its Phase 1 surface drill program at the Eagle Project, which extended the mineralized strike beyond the area covered by the Historical Estimate and intersected zinc-silver mineralization to the northeast of the McCabe Mine, according to the company. Following that program, management investigated the most efficient method to access the underground workings, and determined that accessing the underground by the ventilation raise is expected to be the most cost-effective means, with an indicative budget of approximately US$3.7 million, subject to the results of the initial engineering work. The Company stated it expects to be funded to complete this work.

Key Highlights

• The Company engaged Hancon Mining Division USA Corp. under an Engineering Agreement dated September 29, 2026 to complete engineering design work for reopening the McCabe Mine.
• The total cost of work under the Engineering Agreement is a maximum of US$391,344, inclusive of the Margin, and is expected to commence on or about October 14, 2026.
• Hancon has provided an indicative budget proposal of approximately US$3.7 million, payable in cash and shares, for the Engineering Agreement work plus the balance of the program.
• Once underground access is re-established, the Company expects to be able to drill approximately 5% of the metres required to reach the same targets from surface, with cost per metre also budgeted to be significantly lower.
• Management estimates the replacement installation cost of the existing underground infrastructure, including the ventilation raise and Sooner Shaft, at approximately US$40 million and two years of work.
• The balance of the program is anticipated to occur over approximately eight months, with a Phase 1 underground drill program targeted for the third quarter of 2027.
• The McCabe Mine has a historical estimate of approximately 880,000 ounces of gold at 11.7 g/t and 5 million ounces of silver at 69 g/t, according to the company, which cautions this Historical Estimate is not current and should not be relied upon.

Strategic/Operational Context

According to the company, re-establishing underground access will allow the Company to benefit from substantial existing infrastructure at the McCabe Mine, including the 14-foot-diameter, concrete-lined Sooner Shaft, which reaches a depth of 1,620 feet (approximately 500 metres), and at least five kilometres of underground drifts. The Company stated that underground drilling has the potential to significantly reduce costs relative to drilling the same targets from surface, while also shortening the timeline to define a resource and test new targets of mineralization.

Kevin Reid, Chief Executive Officer of Arizona Eagle, commented: "We are extremely pleased to partner with Hancon Mining to reopen the McCabe Mine for underground drilling and exploration. Hancon is one of North America's premier underground mining contractors and has built and operated many mines similar to McCabe for some of the world's largest mining companies. Getting underground at McCabe will allow us to drastically increase our drilling output while also reducing costs. Getting the drills underground and right up to the known historic mineralization can result in an up to 95% reduction in metres required, as compared to drilling the same targets from surface. It can also materially improve targeting. This is made possible by taking advantage of the extensive underground infrastructure put in place by previous operators. We estimate the replacement installation cost of the ventilation raise and the Sooner Shaft at the McCabe Mine to be at least US$40 million. We are fully funded to re-access the underground workings and begin a Phase 1 underground drill program."

The Company stated that this work is being advanced in parallel with its ongoing surface exploration and target generation, including a SkyTEM airborne geophysical survey announced on August 25, 2026 and September 15, 2026, which is expected to assist in delineating mineralization types and refining targets for a Phase 2 drill program. The Company noted that the indicative budget proposal is preliminary and remains subject to the results of the initial engineering work, and that the balance of the program is not covered by the Engineering Agreement. The Company stated there can be no assurance that it will enter into a separate agreement for the balance of the program or that the final cost will not differ materially from the indicative budget proposal.

Engineering Agreement and Share Consideration

• Under the Engineering Agreement, Hancon will complete an onsite survey and collect and test core samples of the concrete in the Sooner Shaft and the ventilation raise to confirm their condition.
• Hancon will conduct dewatering and pump testing of the shaft to a depth of approximately 300 feet to confirm water handling and discharge rates.
• Hancon will complete detailed engineering design and procurement planning for the Alimak raise-climber system to be used to access, rehabilitate and dewater the balance of the underground workings.
• Hancon will be reimbursed in cash for the actual cost of the engineering design work, without markup, to a maximum of US$326,120, plus a further 20% margin of up to US$65,224 (the "Margin").
• The Company intends to satisfy the Margin in common shares in order to preserve cash, and may elect to pay all or any part of the Margin in cash.
• The deemed price per common share will be the greater of the 30-day volume-weighted average trading price and the Discounted Market Price as defined in TSXV policies, with the Margin converted into Canadian dollars at the Bank of Canada daily exchange rate.
• Common shares issued in satisfaction of the Margin are expected to be issued upon completion of the engineering design work, in the first quarter of 2027, subject to TSXV acceptance and a statutory hold period of four months and one day from the date of issuance.
• Hancon is at arm's length to the Company, according to the company.

Shaft, Vent Raise and Dewatering Work Completed to Date

• In August 2026, the Company accessed the Sooner Shaft and, in early September, reopened it for the first time since 1993 to collect water samples confirming suitability for discharge and pump testing.
• A camera lowered down the shaft encountered the water table at 140 feet and reached the shaft bottom at a depth of 1,620 feet (500 metres) without encountering obstructions; the shaft concrete and steel appeared, on preliminary examination, to be in very good condition.
• In early September, the Company located and reopened the McCabe Mine ventilation raise, approximately 1,300 feet (400 metres) south of the Sooner Shaft, sampling water and lowering a camera to a depth of 430 feet without encountering obstructions.
• On September 16, 2026, the Company hosted a site visit for Hancon's engineering team at both the Sooner Shaft and the ventilation raise.
• The Company has been in contact with the Arizona Department of Environmental Quality and has identified locations that would allow for discharge pumping without additional permitting requirements, with water testing confirming suitable quality for discharge and pump testing.

Resources and Financials

• Historical Estimate: approximately 880,000 ounces of gold grading 11.7 g/t and 5 million ounces of silver grading 69 g/t, defined to a maximum depth of approximately 440 metres and open in all directions, according to the company.
• Total cost under the Engineering Agreement: maximum of US$391,344, inclusive of the Margin.
• Indicative budget proposal for the balance of the program: approximately US$3.7 million, payable in cash and shares.
• Estimated replacement cost of existing underground infrastructure: approximately US$40 million and two years of work, according to the company.
• Historical investment by Stan West Mining to drill and develop the mine: more than US$35 million (approximately C$110 million in today's dollars), according to the company.
• Eagle Project land position: 4,169 acres, expanded from staking and acquisitions over the past two years.

The Historical Estimate is a historical estimate for the purposes of National Instrument 43-101. According to the company, it is not current, is not being treated by the Company as current mineral resources or current mineral reserves, and should not be relied upon. A Qualified Person has not done sufficient work to classify the Historical Estimate as current mineral resources or current mineral reserves.

What to Watch Next

• Commencement of engineering work under the Engineering Agreement, expected on or about October 14, 2026.
• Completion of the initial engineering and assessment work, which is expected to inform the scope, budget and timing of the balance of the program.
• A potential separate agreement with Hancon for the balance of the program, expected to be entered into following completion of the initial engineering work, subject to board approval and a subsequent news release.
• Issuance of common shares in satisfaction of the Margin, expected upon completion of the engineering design work in the first quarter of 2027, subject to TSXV acceptance.
• A Phase 1 underground drill program, targeted for the third quarter of 2027 following completion of the balance of the program, anticipated to occur over approximately eight months.

About Hancon Mining

Hancon Mining is a full-service underground mining contractor operating across Canada and the United States. Built by miners and driven by experience, Hancon specializes in mine and ramp development, underground construction, long-hole production drilling, Alimak raise mining, rehabilitation, and specialized underground services. Hancon's current North American portfolio includes projects across Ontario and Idaho, supporting leading mining companies including Pan American Silver, Alamos Gold, Agnico Eagle, Discovery Silver, and Americas Gold and Silver.

About Arizona Eagle Mining Corp.

Arizona Eagle is a mineral exploration company focused on the acquisition, exploration and development of mineral properties. Arizona Eagle's principal asset is the Eagle Project, a 4,169-acre property comprising patented and unpatented claims located near the town of Prescott Valley in Yavapai County, Arizona. The Eagle Project is centered on the past-producing McCabe Mine, a high-grade gold-silver deposit, and includes multiple parallel structures hosting past-producing mines that remain largely untested by modern drilling. While Arizona Eagle's primary focus will be on the exploration and development of the Eagle Project, it will continue to own its legacy land portfolio in the Thompson Nickel Belt of northern Manitoba.

Read full press release here.

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